For years, the Charles Darwin Foundation’s Research Station on the Galápagos Islands, some 900km west of Ecuador, operated a small store to help it get by in lean times – selling mostly clothing with the foundation’s logo. But then it added swimsuits, sunglasses, Ecuadorian chocolate and artwork, and the local traders cried foul. The town’s mayor agreed and shut down the store.

Now the oldest and most prominent research organisation in the famed archipelago that inspired Darwin’s masterwork, On the Origin of Species, says that, as a result of the loss of the store, it is flat broke and could cease to exist.

“I think the correct expression is the situation is touch and go,” said Swen Lorenz, the foundation’s chief executive. “We are possibly only a few weeks away” from closing. His pleas to donors as part of an attempt to raise $1m have fallen on deaf ears.

The shuttering of the bright yellow gift shop was, perhaps, the fatal blow for the foundation. Donors, academics and scientists say the loss of the roughly $32,000 a month the shop generated pushed the organisation more deeply into a hole it had been digging for some time. They said the foundation did not live within its $3.5m annual budget, even as donations shrank over the past 20 years.

The foundation is facing extinction because it failed to heed Darwin’s signature observation: to survive, it needed to evolve and adapt.

If the foundation goes bankrupt as expected, the Galápagos would lose its most knowledgeable research team that, during a half-century of existence, amassed an enormous database of animal specimens in one of the world’s most biodiverse archipelagos. Its work has saved birds such as the mangrove finch from likely extinction and has helped preserve everything from giant tortoises to plant varieties.

The research station has served “as a conduit for international support of conservation in Galápagos”, said Peter Grant, a Princeton University biologist who has conducted research there. “If the foundation fails, it’s anybody’s guess what will happen. We have not heard of any contingency plans.”

But today it is far from the only research outfit in the islands that comprise the Galápagos. Even the Galápagos Conservancy in Fairfax, Virginia, a group founded solely to fund the foundation, is giving more and more money to its competitors. Under the US tax code, it could not donate to a single entity overseas, said Johannah Barry, founder and president of the conservancy. So it has spread its wealth to other research groups in the archipelago while significantly cutting funds to the foundation.

Regardless, critics said, the foundation clings to around 60 employees it can scarcely afford. “The budget situation they find themselves in is complex and not new,” said Barry. She’s doubtful it can survive. “It’s deeply unfortunate. There are people I’ve worked with for two decades who are in dire straits.”

Operating a research station such a long way off the coast of Ecuador in the Pacific ocean comes at a high price, Lorenz said. The foundation’s operating budget is split between costs for overheads and science, including employees, lab equipment, boats and gear. It is charged more than $50,000 alone each year for internet access and $36,000 for electricity.

A tortoise feeds at the Fausto Llerena Breeding Center of the Galápagos National Park and the Charles Darwin Research Station. Photograph: Dolores Ochoa/AP

Lorenz said that the foundation has cut staff. When he arrived about three years ago, there were 105 employees; now there are 65. There’s no science director, only a consultant. There’s only one person dedicated to fundraising on site, making the goal of raising money nearly impossible. That’s why a store that raised more than $300,000 a year was important.

“There are some redundant staff in our organisation,” Lorenz acknowledged. But it’s cheaper to keep them, he said, because Ecuadorian labour laws require workers to receive severance based on length of employment and salary. “In July, I paid off one long-standing staff [member] at a cost of $150,000.”

Lorenz added: “We have some outside people criticising us for all sorts of aspects, but their knowledge of the … situation on the ground is fairly limited.”

There’s not enough will to rescue the struggling foundation, some say, and even less money. Dennis Geist, the foundation’s president, said he’s not optimistic about potential donors. “The outlook’s bleak right now,” he said.

The foundation and research centre were established in 1959, 100 years after Darwin’s signature work, along with the Galápagos National Park, whose conservationists used data collected at the centre.

For three decades, the foundation was out there nearly alone, a star among research operations, with the best scientists and best research. It remains the most respected in the islands. But nearly half a dozen newer and highly regarded research organisations are now established there, including the Galápagos National Park, World Wildlife Fund and San Francisco de Quito University, and each is poised to at least take over parts of the Darwin foundation’s mission. If needed, they could start filling a gap left by the foundation as soon as January, Barry said.

Lorenz said he is working hard to avoid that. Contradicting the foundation’s critics, he insists that the financial woes are connected to revenue lost when Leopoldo Bucheli Mora, mayor of the municipality of Santa Cruz, ordered the gift shop to close in July. The shop had operated at the research station’s headquarters in Puerto Ayora on Santa Cruz Island since the early 1990s, selling goods mostly to eco-tourists. But it became the target of heated protests after the January expansion.

Local traders complained that the gift shop had entered into direct competition with their own stores. In March, the traders complained to the mayor, who sided with his constituents, saying the expansion lacked a proper permit.

Bucheli Mora declined to comment on events that led to the gift shop’s closure. But local newspapers, such as El Comercio, reported that he issued an ultimatum: go back to selling only books and assorted items with the foundation’s logo, and stop selling bathing suits, chocolate and art. When the foundation declined, the mayor refused its operating permit.

Lorenz called the decision “an abuse of power”. He said the national government supports the foundation, and so does the national park. But he acknowledged that neither has challenged the mayor.

“I’m obviously very flabbergasted,” Lorenz said. “We’ve been in this country a long time.”

Not everyone is sure that the mayor’s action was out of bounds, and even if it was, picking a fight with a foreign municipality seems ill-advised, several critics said.

“It’s very important for institutions to adapt and adopt,” Barry said.

This article appeared in Guardian Weekly, which incorporates material from the Washington Post